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101	101	|(% style="width:270px" %)Airbus A321|(% style="width:107px" %)14|(% style="width:98px" %)-|(% style="width:89px" %)14|(% style="width:97px" %)-|(% style="width:79px" %)14|(% style="width:102px" %)-|(% style="width:79px" %)14
102	102	|(% style="width:270px" %)Airbus A320|(% style="width:107px" %)5|(% style="width:98px" %)-|(% style="width:89px" %)5|(% style="width:97px" %)-|(% style="width:79px" %)5|(% style="width:102px" %)-|(% style="width:79px" %)5
103	103	|(% style="width:270px" %)Airbus A319|(% style="width:107px" %)20|(% style="width:98px" %)-|(% style="width:89px" %)20|(% style="width:97px" %)-|(% style="width:79px" %)20|(% style="width:102px" %)-|(% style="width:79px" %)20
104		-|(% style="width:270px" %)Total Air Canada Rouge|(% style="width:107px" %)39|(% style="width:98px" %)-|(% style="width:89px" %)39|(% style="width:97px" %)-|(% style="width:79px" %)39|(% style="width:102px" %)-|(% style="width:79px" %)39
105		-|(% style="width:270px" %)Total Mainline & Rouge|(% style="width:107px" %)214|(% style="width:98px" %)4|(% style="width:89px" %)218|(% style="width:97px" %)9|(% style="width:79px" %)227|(% style="width:102px" %)5|(% style="width:79px" %)232
	104	+|(% style="width:270px" %)**Total Air Canada Rouge**|(% style="width:107px" %)**39**|(% style="width:98px" %)**-**|(% style="width:89px" %)**39**|(% style="width:97px" %)**-**|(% style="width:79px" %)**39**|(% style="width:102px" %)**-**|(% style="width:79px" %)**39**
	105	+|(% style="width:270px" %)**Total Mainline & Rouge**|(% style="width:107px" %)**214**|(% style="width:98px" %)**4**|(% style="width:89px" %)**218**|(% style="width:97px" %)**9**|(% style="width:79px" %)**227**|(% style="width:102px" %)**5**|(% style="width:79px" %)**232**
106	106	(% class="info" %)|(% style="width:270px" %)**Air Canada Express**|(% style="width:107px" %) |(% style="width:98px" %) |(% style="width:89px" %) |(% style="width:97px" %) |(% style="width:79px" %) |(% style="width:102px" %) |(% style="width:79px" %)
107	107	|(% style="width:270px" %)Embraer 175|(% style="width:107px" %)25|(% style="width:98px" %)-|(% style="width:89px" %)25|(% style="width:97px" %)-|(% style="width:79px" %)25|(% style="width:102px" %)-|(% style="width:79px" %)25
108	108	|(% style="width:270px" %)Mitsubishi CRJ-200|(% style="width:107px" %)15|(% style="width:98px" %)-|(% style="width:89px" %)15|(% style="width:97px" %)-|(% style="width:79px" %)15|(% style="width:102px" %)-|(% style="width:79px" %)15
...	...	@@ -112,131 +112,102 @@
112	112	|(% style="width:270px" %)**Total Air Canada Express**|(% style="width:107px" %)**123**|(% style="width:98px" %)**(9)**|(% style="width:89px" %)**114**|(% style="width:97px" %)**-**|(% style="width:79px" %)**114**|(% style="width:102px" %)**(3)**|(% style="width:79px" %)**111**
113	113
114	114
115		-Financial Highlights
	115	+[[image:ACDVF3.png]]
116	116
117	117
	118	+= Financial Highlights =
	119	+
118	118	Air Canada and the rest of the global airline industry have faced significantly lower traffic than in 2019, and a corresponding decline in revenue and cash flows, as a result of the COVID-19 pandemic and the travel restrictions imposed in many countries around the world, including in Canada. Conditions have improved and travel restrictions have been lifted in many countries, but Air Canada cannot predict the timing and extent of the return to pre-pandemic levels.
119	119
	122	+
120	120	Over the quarter, and until February 28, 2022, all travellers, regardless of vaccination status, were required to provide a negative pre-entry COVID-19 PCR test result taken within 72 hours of departure or a proof of a positive test result received in the previous 11 to 180 days. On February 15, 2022, the Government of Canada announced changes to certain travel restrictions for fully vaccinated travellers.
121	121
	125	+
122	122	On March 17, 2022, the Government of Canada announced additional changes that came into effect on April 1, 2022, allowing for fully vaccinated travellers to no longer be required to provide a pre-entry COVID19 test result to enter Canada by air, land or water. Foreign nationals who do not meet the requirements to be considered fully vaccinated are not able to enter Canada unless they meet an exemption set out in the Orders made under the Quarantine Act. Unvaccinated or partially vaccinated travellers allowed to enter Canada, remain subject to the federal requirement to quarantine and take a COVID-19 PCR test at the time of arrival and on day eight after arrival.
123	123
	128	+
124	124	Since the onset of the pandemic, Air Canada has actively managed its ASM capacity based on prevailing market trends and travel demand. In January 2022, in response to the emergence of the Omicron variant and the associated short-term decline in demand, Air Canada suspended flights to certain Caribbean destinations from January 24 to April 30, 2022.
125	125
126	126
127	127	First quarter 2022 operating revenues of $2,573 million compared to first quarter operating revenues of $729 million in 2021, an increase of $1,844 million or about 3.5 times. Compared to first quarter 2019, operating revenues decreased $1,880 million or 42% due to the impact of the COVID-19 pandemic and travel restrictions imposed.
128	128
	134	+
129	129	First quarter 2022 operating expenses of $3,123 million versus operating expenses of $1,778 million in the first quarter of 2021, an increase of $1,345 million or 76% on a capacity increase of 239.5% and the impact of a 57% increase in fuel cost.
130	130
	137	+
131	131	First quarter 2022 operating loss of $550 million decreased by $499 million from the first quarter of 2021.
132	132
	140	+
133	133	First quarter 2022 EBITDA (excluding special items) of negative $143 million improved $620 million from the first quarter of 2021.
134	134
135		-• Net cash flows from operating activities of $335 million in the first quarter of 2022 versus net cash used in operating activities of $888 million in the first quarter of 2021, reflecting the significant recovery in advance ticket sales and the improvement in operating results. Refer to section 7.5 “Cash Flow Movements” of this MD&A for additional information.
136	136
137		-System Passenger Revenues
	144	+Net cash flows from operating activities of $335 million in the first quarter of 2022 versus net cash used in operating activities of $888 million in the first quarter of 2021, reflecting the significant recovery in advance ticket sales and the improvement in operating results. Refer to section 7.5 “Cash Flow Movements” of this MD&A for additional information.
138	138
139		-In the first quarter 2022, passenger revenues of $1,917 million increased nearly five-fold from the first quarter of 2021. At the system level, capacity increased by 239.5% while traffic increased 417.9%, which translated into a 22.8 percentage point increase in passenger load factor. The 239.5% capacity increase was generally in line with the 243% increase projected in Air Canada’s news release dated February 18, 2022, mainly due to the greater impact of the Omicron variant as well as additional travel restrictions placed on some operations in Asia. Passenger revenue per ASM (PRASM) in the first quarter of 2022 increased 43.1% when compared to the first quarter of 2021. These results are largely attributable to the impact of the COVID-19 pandemic and the significant travel restrictions in the first quarter of 2021 compared to the first quarter of 2022. The airline has started re-introducing service on many U.S. and International routes that were fully suspended last year due to these restrictions.
140	140
141		-Cargo Revenues
	147	+[[image:ACDVF4.jpeg]]
142	142
143		-In the first quarter of 2022, cargo revenues of $398 million increased $117 million or 41.7% from the first quarter of 2021. Robust demand supported by increased capacity led to strong revenue performance for the quarter with yield increasing 30% year-over-year. Demand for cargo services in the Pacific market was strong during the first quarter of 2022. As a result, Pacific cargo revenues increased $86 million from the first quarter of 2021, representing about 73% of the total cargo revenue improvement.
144	144
145		-Other Revenues
	150	+**System Passenger Revenues**
146	146
147		-In the first quarter of 2022, other revenues of $258 million increased $205 million from the first quarter of 2021, representing a growth of about 4.9 times. The increase was primarily due to a higher volume of ground package sales at Air Canada Vacations, reflecting the increased demand for vacation packages and the impact of the suspension of flights to Mexico and the Caribbean between January 31, 2021 and June 26, 2021. Increases in on-board revenues from passenger volumes and non-air revenues related to the Aeroplan program also contributed to the improvement.
148		-
149		-Operating Expenses
150		-
151		-In the first quarter of 2022, total operating expenses of $3,123 million increased $1,345 million or 76% from the first quarter of 2021. The variance was mainly the result of increases in nearly all line items largely reflecting the year-over-year growth in operating capacity of 239.5% and in traffic of 417.9%.
152		-
153		-In the first quarter of 2022, fuel expense of $750 million increased $550 million from the first quarter of 2021. The increase was a result of a 57.2% increase in jet fuel prices, as well as more jet fuel litres used as a result of the higher volume of flying compared to the first quarter of 2021.
154		-
155		-In the first quarter of 2022, wages, salaries, and benefits of $707 million increased $179 million or 34% from the first quarter of 2021. The variance was mainly due to an increase in wages and salaries reflecting the increase in FTEs compared to the same period in 2021 as Air Canada increased its flying volume yearover-year. The increase was partially offset by lower average salaries largely as the result of a change in active employee mix.
156		-
157		-In the first quarter of 2022, regional airlines expense (excluding fuel and ownership costs) of $316 million increased $121 million or 62% from the first quarter of 2021. The increase was primarily driven by higher expenses due to higher volume of flying compared to the first quarter of 2021 and was partially offset by savings from the consolidation of regional flying.
158		-
159		-In the first quarter of 2022, depreciation and amortization expense of $403 million decreased $10 million or 2% compared to the first quarter of 2021. The additions of new Airbus A220-300 and Boeing 737 MAX aircraft and refurbishment of the Airbus A330 cabin were offset by the return of leased aircraft and retirement of certain older aircraft from the fleet.
160		-
161		-In the first quarter of 2022, aircraft maintenance expense of $26 million decreased $124 million or 83% from the first quarter of 2021.
162		-
163		-In the first quarter of 2022, ground package costs of $129 million increased $124 million from the first quarter of 2021. The increase was due to higher volume of ground packages sales at Air Canada Vacations compared to the first quarter of 2021. Air Canada suspended its flights to Mexico and Caribbean destinations between January 31, 2021 and June 26, 2021.
164		-
165		-
166		-Net Debt
167		-
168		-As at March 31, 2022, net debt of $7,031 million decreased $89 million from December 31, 2021, reflecting the impact of net cash from operating and investing activities in the first quarter of 2022. The impact of a stronger Canadian dollar at March 31, 2022 compared to December 31, 2021, decreased foreign currency denominated debt (mainly U.S. dollars) by $132 million.
169		-
170		-
171		-Financial Highlights
172		-
173		-
174		-Air Canada and the rest of the global airline industry have faced significantly lower traffic than in 2019, and a corresponding decline in revenue and cash flows, as a result of the COVID-19 pandemic and the travel restrictions imposed in many countries around the world, including in Canada. Conditions have improved and travel restrictions have been lifted in many countries, but Air Canada cannot predict the timing and extent of the return to pre-pandemic levels.
175		-
176		-Over the quarter, and until February 28, 2022, all travellers, regardless of vaccination status, were required to provide a negative pre-entry COVID-19 PCR test result taken within 72 hours of departure or a proof of a positive test result received in the previous 11 to 180 days. On February 15, 2022, the Government of Canada announced changes to certain travel restrictions for fully vaccinated travellers.
177		-
178		-On March 17, 2022, the Government of Canada announced additional changes that came into effect on April 1, 2022, allowing for fully vaccinated travellers to no longer be required to provide a pre-entry COVID19 test result to enter Canada by air, land or water. Foreign nationals who do not meet the requirements to be considered fully vaccinated are not able to enter Canada unless they meet an exemption set out in the Orders made under the Quarantine Act. Unvaccinated or partially vaccinated travellers allowed to enter Canada, remain subject to the federal requirement to quarantine and take a COVID-19 PCR test at the time of arrival and on day eight after arrival.
179		-
180		-Since the onset of the pandemic, Air Canada has actively managed its ASM capacity based on prevailing market trends and travel demand. In January 2022, in response to the emergence of the Omicron variant and the associated short-term decline in demand, Air Canada suspended flights to certain Caribbean destinations from January 24 to April 30, 2022.
181		-
182		-
183		-First quarter 2022 operating revenues of $2,573 million compared to first quarter operating revenues of $729 million in 2021, an increase of $1,844 million or about 3.5 times. Compared to first quarter 2019, operating revenues decreased $1,880 million or 42% due to the impact of the COVID-19 pandemic and travel restrictions imposed.
184		-
185		-First quarter 2022 operating expenses of $3,123 million versus operating expenses of $1,778 million in the first quarter of 2021, an increase of $1,345 million or 76% on a capacity increase of 239.5% and the impact of a 57% increase in fuel cost.
186		-
187		-First quarter 2022 operating loss of $550 million decreased by $499 million from the first quarter of 2021.
188		-
189		-First quarter 2022 EBITDA (excluding special items) of negative $143 million improved $620 million from the first quarter of 2021.
190		-
191		-• Net cash flows from operating activities of $335 million in the first quarter of 2022 versus net cash used in operating activities of $888 million in the first quarter of 2021, reflecting the significant recovery in advance ticket sales and the improvement in operating results. Refer to section 7.5 “Cash Flow Movements” of this MD&A for additional information.
192		-
193		-System Passenger Revenues
194		-
195	195	In the first quarter 2022, passenger revenues of $1,917 million increased nearly five-fold from the first quarter of 2021. At the system level, capacity increased by 239.5% while traffic increased 417.9%, which translated into a 22.8 percentage point increase in passenger load factor. The 239.5% capacity increase was generally in line with the 243% increase projected in Air Canada’s news release dated February 18, 2022, mainly due to the greater impact of the Omicron variant as well as additional travel restrictions placed on some operations in Asia. Passenger revenue per ASM (PRASM) in the first quarter of 2022 increased 43.1% when compared to the first quarter of 2021. These results are largely attributable to the impact of the COVID-19 pandemic and the significant travel restrictions in the first quarter of 2021 compared to the first quarter of 2022. The airline has started re-introducing service on many U.S. and International routes that were fully suspended last year due to these restrictions.
196	196
197		-Cargo Revenues
198	198
	155	+**Cargo Revenues**
	156	+
199	199	In the first quarter of 2022, cargo revenues of $398 million increased $117 million or 41.7% from the first quarter of 2021. Robust demand supported by increased capacity led to strong revenue performance for the quarter with yield increasing 30% year-over-year. Demand for cargo services in the Pacific market was strong during the first quarter of 2022. As a result, Pacific cargo revenues increased $86 million from the first quarter of 2021, representing about 73% of the total cargo revenue improvement.
200	200
201		-Other Revenues
202	202
	160	+**Other Revenues**
	161	+
203	203	In the first quarter of 2022, other revenues of $258 million increased $205 million from the first quarter of 2021, representing a growth of about 4.9 times. The increase was primarily due to a higher volume of ground package sales at Air Canada Vacations, reflecting the increased demand for vacation packages and the impact of the suspension of flights to Mexico and the Caribbean between January 31, 2021 and June 26, 2021. Increases in on-board revenues from passenger volumes and non-air revenues related to the Aeroplan program also contributed to the improvement.
204	204
205		-Operating Expenses
206	206
	165	+**Operating Expenses**
	166	+
207	207	In the first quarter of 2022, total operating expenses of $3,123 million increased $1,345 million or 76% from the first quarter of 2021. The variance was mainly the result of increases in nearly all line items largely reflecting the year-over-year growth in operating capacity of 239.5% and in traffic of 417.9%.
208	208
	169	+
209	209	In the first quarter of 2022, fuel expense of $750 million increased $550 million from the first quarter of 2021. The increase was a result of a 57.2% increase in jet fuel prices, as well as more jet fuel litres used as a result of the higher volume of flying compared to the first quarter of 2021.
210	210
	172	+
211	211	In the first quarter of 2022, wages, salaries, and benefits of $707 million increased $179 million or 34% from the first quarter of 2021. The variance was mainly due to an increase in wages and salaries reflecting the increase in FTEs compared to the same period in 2021 as Air Canada increased its flying volume yearover-year. The increase was partially offset by lower average salaries largely as the result of a change in active employee mix.
212	212
	175	+
213	213	In the first quarter of 2022, regional airlines expense (excluding fuel and ownership costs) of $316 million increased $121 million or 62% from the first quarter of 2021. The increase was primarily driven by higher expenses due to higher volume of flying compared to the first quarter of 2021 and was partially offset by savings from the consolidation of regional flying.
214	214
	178	+
215	215	In the first quarter of 2022, depreciation and amortization expense of $403 million decreased $10 million or 2% compared to the first quarter of 2021. The additions of new Airbus A220-300 and Boeing 737 MAX aircraft and refurbishment of the Airbus A330 cabin were offset by the return of leased aircraft and retirement of certain older aircraft from the fleet.
216	216
	181	+
217	217	In the first quarter of 2022, aircraft maintenance expense of $26 million decreased $124 million or 83% from the first quarter of 2021.
218	218
	184	+
219	219	In the first quarter of 2022, ground package costs of $129 million increased $124 million from the first quarter of 2021. The increase was due to higher volume of ground packages sales at Air Canada Vacations compared to the first quarter of 2021. Air Canada suspended its flights to Mexico and Caribbean destinations between January 31, 2021 and June 26, 2021.
220	220
221	221
222		-Net Debt
	188	+**Net Debt**
223	223
224	224	As at March 31, 2022, net debt of $7,031 million decreased $89 million from December 31, 2021, reflecting the impact of net cash from operating and investing activities in the first quarter of 2022. The impact of a stronger Canadian dollar at March 31, 2022 compared to December 31, 2021, decreased foreign currency denominated debt (mainly U.S. dollars) by $132 million.
225	225
226	226
227		-Commenting on the result Michael Rousseau, President and Chief Executive Officer of Air Canada said.
	193	+[[image:ACDVF5.jpg]]
228	228
229		-[[https:~~/~~/investors.aircanada.com/2022-04-26-Air-Canada-Reports-First-Quarter-2022-Financial-Results>>url:https://investors.aircanada.com/2022-04-26-Air-Canada-Reports-First-Quarter-2022-Financial-Results]]
230	230
	196	+Commenting on the result Michael Rousseau, President and Chief Executive Officer of Air Canada said.{{footnote}}https://investors.aircanada.com/2022-04-26-Air-Canada-Reports-First-Quarter-2022-Financial-Results{{/footnote}}
	197	+
	198	+
231	231	"The substantial year-over-year improvement in Air Canada's first quarter results is clear evidence that a recovery is underway. The company's strong improvement is a testament to its employees, and I thank them for their hard work taking care of its customers throughout more than two years of a global pandemic. Now, its employees are demonstrating this same level of determination, commitment and passion in executing on its recovery strategy,"
232	232
	201	+
233	233	"The year began with weakness brought on by the Omicron variant and travel restrictions. However, the company quickly rebounded in March with passenger volumes exceeding the strong December levels and passenger ticket sales in March 2022 over 90 per cent of March 2019 levels, a leading indicator to much stronger 2022 second and third quarter results. For the quarter, Air Canada had operating revenues of $2.573 billion, more than triple that of the same quarter in the prior year.  This was accompanied by a strict cost discipline that reduced adjusted CASM* by over six per cent from the fourth quarter of 2021. Quarterly EBITDA*, while a negative $143 million, improved $620 million over last year and the company ended the quarter with $10.162 billion in unrestricted liquidity, close to 2021 year-end levels.
234	234
	204	+
235	235	"In anticipation of its recovery, Air Canada has kept the course with key long-term projects to increase and diversify revenue and lower costs. One such program is the expansion of Air Canada Cargo, with quarterly revenue up 42 per cent to $398 million from the first quarter of 2021, and now further expanded with the addition of two new Boeing 767-300 freighters to be delivered in 2022.  The renegotiation of key engine maintenance contracts completed in the quarter, will also yield savings over the remaining life of the contracts.  Aeroplan air redemption bookings in the quarter exceeded those of the same quarter in 2019 by 19 per cent.  The relaunched program saw the highest new member acquisitions and redemptions in a quarter, and generated third-party gross billings exceeding first quarter 2019 levels by 21 per cent," said Mr. Rousseau.
236	236
	207	+
237	237	"Air Canada is rapidly adapting for the post-pandemic world. Air Canada is doing its part by contributing to the travel of Ukrainians to Canada, with a substantial donation of 100 million Aeroplan points.  Air Canada has also advanced its ESG goals in the quarter by announcing an order for 26 fuel-efficient Airbus A321XLR aircraft, which Air Canada has now increased to 30 aircraft. As well, Air Canada has recently entered into a long-term agreement with International Aero Engines, LLC (Pratt & Whitney) for the selection of the PW1100G-JM engines, spare engines and related maintenance services for these new aircraft.  Air Canada is responding to the evolving competitive landscape through its Rise Higher strategy to elevate all aspects of its business, particularly as it relates to the customer experience. Given pent-up travel demand, the demonstrated loyalty of its customers, and the expected further removal of travel-related government restrictions, Air Canada anticipates its recovery will gain momentum through the balance of 2022 and beyond," said Mr. Rousseau.
238	238
239	239
240		-References
	211	+= References =
241	241
242	242	{{putFootnotes/}}